Paul Solman answers questions from NewsHour viewers and web users on business and economic news here on his Making Sen$e page. Here’s Thursday’s query:
Name: Sue Pruner
Question: In this debt crisis, what would the effect be if many citizens bought savings bonds? What would the effect be on the citizens and on the debt situation?
Paul Solman: Oh, maybe the interest rates we’d have to pay to borrow money would go down a touch. But they’re already at historic lows. The problem isn’t that the United States can’t borrow money cheaply. If there’s a “debt crisis,” it’s because we, as a people, can’t (or won’t) close the gap between federal revenues and federal expenses.
As to savings bonds, our personal finance guru here on Making Sen$e, Boston University professor Zvi Bodie(sattva), recommends I-bonds, which guarantee a return of at least the rate of inflation. Go to the Treasury’s website to learn more about them, and BUY them if you wish.